THE 18 RULES OF STRUCTURAL EQUATION MODELING To perform the analyses described here, you will {a) Prepare program figures and (b) then convert these program figures into PROC CALIS programs. The following 18 rules will guide you in this process: Rule 1: Rule 2: Rule 3: Jule 4: tule 5: In general, only exogenous variables are allowed to have covariances. A residual term must be identified for each endogenous variable in the model. Exogenous variables do not have residual terms. Variances should be estimated for every exogenous variable in the model, including residual terms. In most cases, covariances should be estimated for every possible pair of manifes exogenous variables; covariances are not estimated for endogenous variables.Rule 6: For simple recursive models, covariances should not be estimated for residual terms. Rule 7: One equation should be created for each endogenous variable, with that variables’s name to the left of the equals sign. Rule 8: Variables that have a direct effect on that Rule 10: Rule 11: endogenous variable are listed to the right of the equals sign. Exogenous variables, including residual terms, are never listed to the left of the equals sign. To estimate a path coefficient for a independent variable, a unique path Coefficient name should be created for the path coefficient associated with that independent variable. The {ast term in each equation should be the residual (disturbance) term for that endogenous variable; this E (or D) term will have no name for its path coefficient.Rule 12: Rule 13: Rule 14: Rule 15: Rule 16: Rute 17: Rule 18: To estimate a parameter, create a name for that parameter. To fixa parameter at a given numerical value, insert that value in the place of the parameter’s name. To constrain two or more parameters to be equal, use the same name for those parameters. In confirmatory factor analysis, the variances of the latent F variables are usually fixed at 1. In path analysis with latent variables, the variances of the exogenous F variables are free parameters to be estimated. In path analysis with latent variables, one factor loading for each F variable should be fixed at 1. In a confirmatory factor analysis of a nonstandard model, the variances of a manifest structural variable should be a free Parameter to be estimated.